Finance Insurance

Married Women Property Act in Life Insurance

Term life insurance

Every individual constantly aim to protect their loved once and ensure they leave no stone unturned in fulfilling their needs and securing them financially. Having said that, today in India, the number of men opting for secure future is more as compare to woman. It is equally important for the spouse to plan for a financially secure life in order to back their family in the times of uncertainties.

In India found that only 59% of women have a life insurance policy as compared to 68% of men. An alarming 38% women in metro cities felt their savings wouldn’t last more than a year in case of critical illness or death in the family as against 27% for men.

Women lag in life insurance and Term life insurance awareness and ownership as compared to men. Only 19% of the working women in metro cities have term insurance ownership. For a woman to buy a life cover, she should have enough income to meet her finance and adequate savings to pay the premium with ease.

If she is dependent on her husband’s life cover, there can be case where the creditor may take their share from the Sum Assured. This can defeat the purpose of life insurance, that her husband bought for the family‘s secure future.

“But the Married Women Property Act, 1874, solve the problem”

Let’s understand how this concept is work?

Case study

Nilesh is a smart engineer from NIT, Trichy with MBA from IIM, Banglore. He is currently working with Asian Paint as Senior Brand Manager. He belongs to a humble middle class family from a small town in Andhra Pradesh .He is married to a traditional Sweet girl from Kerala, who is a home maker and has a three years old daughter.

Despite earning in 7 figures annually, he is still very cautious while choosing his expenses. He believes that his investment are his monthly primary expenses. Recently, he purchased a 4 BHK flat Gurgaon for Rs. 2 Crores against loan of rupees 1.5 Crore. For repaying the loan, he has a monthly commitment of around rupees 1.2 lacs per month.

After all his daily expenses and commitments, he is not able to saves anything extra. Still, to protect his family from any unforeseen circumstances, he decided to stretch himself and buy Term life insurance for to secure his family against any unforeseen circumstances.

While buing the policy, one of his close friend who knew about the term and condition of life insurance, demonstrated the benefits of Married Women Property Act, 1874, Act in detail and suggested him to opt for the Married Women Property Act, 1874 option for his policy.

Term life insurance

Senario 1: The person has not opted for Married Women Property Act, 1874

A 35 year male, the sole breadwinner of family is running the daily expenses of the family with his wife and child, along with her hefty home loan as well as car loan. He was not able to save anything over and above the regular expenses but with the intention to protect his family from any unfortunate condition, he stretched himself to purchase a   Term life insurance but did not opt for Married Women Property Act, 1874

On completion of 5 year of the policy term, his nominees were completely exposed to uncertainty after his unfortunate demise. They were not able to take care of daily expenses because all the money received as death benefit was transferred to repay his balance home loan.

Senario 2: The person has opted for Married Women Property Act, 1874

A 37 year male, the sole breadwinner of family is running the daily expenses of the family with his wife and 2 child, along with her hefty home loan. He was not able to save anything over and above the regular expenses but with the intention to protect his family from any unfortunate condition, so as sensible individual he stretched himself to purchase a   Term life insurance but opted for Married Women Property Act, 1874.

On completion of 7 year of the policy term, his nominees received the death Benefit upon his unfortunate demise and was in a healthy state to take care of their daily expenses.

Benefits of Married Women Property Act, 1874

  • The policy not being a part of married man’s estate, cannot be taken for tax attachment, court attachment and by his creditors. This will therefore ensure availability of money with wife and children even if some other person files for succession, post death.
  • Families can be protected from the risk of financial loss / business uncertainties.
  • The Married Women Property Act, 1874 provides financial securities to married women for their livelihood and for their child education.
  • The policy holder reserves the right to revoke the appointment of trustees.
  • Beneficiaries can surrender the policy.

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